Barclaycard automatically cancelled my card, £7000 credit limit now lost.

[gizmotesla]

I have had visa card for decades with largish credit limit of around £7000, very light usage, and always paid in full before pbd. The latest Card was issued in 2010 and I did not use it for any purchases but kept it for emergencies only, and was due for renewal at the end of July 2014.

 

However, sometime in Feb 2014 they sent this surprise automatically generated note;

 

“Would you like to keep your Barclaycard account open? We've noticed you haven't used your Barclaycard Classic card for a while and thought your account may longer be needed. That is why on 9 April 2014 we'll close your Barclaycard Classic account for you. This means any credit cards associated with this account will be cancelled unless you tell us otherwise. Don't worry, the other Barclaycard accounts you hold with us won't be affected.”

 

The letter was sent by normal post, dated just “February 2014” and I ignored it because it looked like junk mail. When I found out in July that the card had been cancelled,

 

 

BC at first verbally said they couldn't reopen the card with original credit limit because I did not appear on the electoral register, then in their final response they changed their story and said that they had issued a notice ending the agreement under the terms and conditions, and that my creditworthiness was not an issue.

 

 

The FOS just lied about the whole thing in their non-investigation whitewash which I didn't accept.

My new visa card has a mighty credit limit of £260!

 

What are the legal viewpoints, breach of contract because no valid termination notice or something else, unfair relationship?

Edited December 26, 2015 by gizmotesla
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[Sidewinder]

Sounds as though they have got you by the T&Cs. These seem to be fairly clear that the account can be closed by either party providing that adequate notice is given, that the credit limit can be varied at will etc

 

You probably just weren't profitable to them - they don't like customers who pay off in full and rely on interest and default charges to generate profit

[gizmotesla]

Yes they can close the account, but interestingly they claimed to have issued a notice ending the agreement in accordance with the t&c's as well, claiming that the automatic note generated by their computer is a valid termination notice, and the fos apparently turns a blind eye.

Edited December 26, 2015 by gizmotesla
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[slick132]

Hi Gizmo and welcome to CAG

 

Have you checked to see exactly what your T&C's said about them closing the a/c.

 

It's not the same as terminating an agreement due to non-payment and then demanding the balance be repaid.

 

I can see why they don't want a card with a large credit limit sitting unused. As well as being unprofitable, it poses a bad security risk.

 

[gizmotesla]

This is what Barclaycard wrote in their final response about the t&c's;

 

"May I advise the decision to close your account was not taken lightly and is not a reflection of your credit worthiness. However, your account had not been used since 2010 and we took this to mean you no longer wished to have the facility.

 

The terms and conditions of the Barclaycard agreement state that 'either of us can end the agreement by written notice to the other. Unless there are exceptional circumstances, we will give you 30 days notice before we end this agreement'.

 

I appreciate you were out of the country when this notice was issued, but the account cannot be reopened."

 

They are implying that they have terminated the non-default agreement with the automatically generated note I quoted above. I maintain that note is defective as a termination notice under the CCA and COBS, and unfair relationship rules.

 

Perhaps the account was unprofitable for them, or they perceived it as risky, but don't they also have to act according to the contract too?

[Old Cogger]

you will find they have the right to close an account for inactivity as well, if you have not used it for years well cannot blame them they are not making any money from your account, to suddenly want to use it years later with a high credit limit would be suspect to them as circumstances change even during a year for people, I have seen the agreements which relates to bank accounts and credit cards and invisibility gives them the right to close an account as long as they have informed you within 30 days if I remember correctly.

 

The old adage of not receiving notification in the last xxx years etc probably not work as a note on file that so and so letter sent on, same as in court a note on file that Default sent is all that is needed. Been there.

 

If that was me then just get on with it and build up new file, remember after 2008 a lot of credit limits were lowered and some accounts closed after 30 days notice same with overdrafts as happened to us after the crash.

[gizmotesla]

I accept that the t&c's allow them to terminate. I am questioning their claim to have issued a notice ending the agreement, because their note doesn't clearly or unambiguously state so.

[Sidewinder]

"Would you like to keep your Barclaycard account open? We've noticed you haven't used your Barclaycard Classic card for a while and thought your account may longer be needed. That is why on 9 April 2014 we'll close your Barclaycard Classic account for you. This means any credit cards associated with this account will be cancelled unless you tell us otherwise"

[/Quote]

 

Seems fairly unambiguous to me? Would certainly satisfy the clause stating that an account can be closed with 30 days notice too, therefore no contractual breach.

 

Sorry but I don't think this has legs beyond perhaps a small goodwill payment for inconvenience. It has not damaged your credit file and you are free to apply for other cards. There is no right to a high credit limit automatically and your past history with the Barclaycard that you had would suggest that such a limit was not necessary anyway.

[gizmotesla]

Seems fairly unambiguous to me? Would certainly satisfy the clause stating that an account can be closed with 30 days notice too, therefore no contractual breach.

 

I would say that from a legal perspective it is not so clear or unambiguous because;

 

1. It is a conditional offer, not a notice of their intent.

2. It offers to close the account on my behalf, but does not state that it will end the agreement.

 

The point I am making is that their note doesn't seem to be a legally valid notice to end the agreement under cca 1974, with objective reasons.

 

There are also other important omissions like no return address, no full date, no warnings that I would irreversibly lose credit limit, that I would have to re-apply for a new card, ie witholding important info.

[slick132]

Hi Gizmo,

 

That is why on 9 April 2014 we'll close your Barclaycard Classic account for you.

 

It's not a "conditional offer". It says they'll close the date on that date.

 

I think you're on a hiding to nothing with this. You told BC you were out of the country but told us above that you ignored the letter because you assumed it was junk mail.

 

1. When did the FOS come back with the results of their investigation.

 

2. What do you want as an outcome.

 

[gizmotesla]

It's not a "conditional offer". It says they'll close the date on that date.

 

I think you're on a hiding to nothing with this. You told BC you were out of the country but told us above that you ignored the letter because you assumed it was junk mail.

 

1. When did the FOS come back with the results of their investigation.

 

2. What do you want as an outcome.

 

 

It is conditional, because I could have kept the card open if I told them otherwise, and the credit limit would have been retained.

 

I was out of the country, but my mum was checking mail and it looks like a junk mail offer.

 

Date of fos decision was 30th Sept 2015.

 

I would like my card re-opened with £7000 credit limit as it was before their kind offer.

[slick132]

Hi Gizmo,

 

It is conditional, because I could have kept the card open if I told them otherwise, and the credit limit would have been retained.

 

I was out of the country, but my mum was checking mail and it looks like a junk mail offer.

 

Date of fos decision was 30th Sept 2015.

 

I would like my card re-opened with £7000 credit limit as it was before their kind offer.

 

In some cases, we'd recommend appealing the FOS Adjudicator's decision, seeking a review by an Ombudsman. In your case here, I really see now point.

 

You received notice of intent to close the a/c and YM failed to tell you this was an important letter that required your response to keep the a/c open.

 

IMHO, it's not going to be reopened with the high credit limit. I'd suggest you pick your battles wisely and move on. As suggested above, use the new a/c regularly and they'll raise the credit limit if you use the card and repay within the T&C's.

 

[gizmotesla]

You received notice of intent to close the a/c and YM failed to tell you this was an important letter that required your response to keep the a/c open.

 

1. Their computer generated note says they'll close the account automatically unless I say otherwise, but no statement about ending the agreement.

 

2. Their final response states they issued a notice to end the agreement under its t&c's.

 

IMHO, there are legal/contractual ramifications in the inconsistency of the two statements from the bank, and I dispute statement no.2 and also not sure it would hold up in court under scrutiny.

 

Closing the account is not equivalent to ending the agreement from a contractual standpoint. For example, they could reopen the account under the original agreement, if still in effect. I'd be interested in a legal opinion from someone with that background or experience.

 

Adjudicator, ombudsman and senior manager refused to notice or venture to comment about it in their responses,

[citizenB]

 

1. Their computer generated note says they'll close the account automatically unless I say otherwise, but no statement about ending the agreement.

 

Erm, sorry.. but how else could this be interpreted ? They advise you need to contact them, else they will close the account (which is the agreement) ?

[Old Cogger]

talk about spilt milk,

[gizmotesla]

Erm, sorry.. but how else could this be interpreted ? They advise you need to contact them, else they will close the account (which is the agreement) ?

 

I don't agree with your interpretation that the account is the agreement.

 

My interpretation is that the agreement is the contractual relationship with associated obligations for both parties arising from the t&c's together with the implied terms of cca 1974 (&2006 section 140a unfair relationships) and COBS, whereas the account (or accounting) is the processing and recording of transactions under the agreement.

 

Another example of their distinction could be when an account is blocked or suspended, but the agreement is still in effect.

Edited December 27, 2015 by gizmotesla
added unfair relationships

[renegadeimp]

They are following their side of the agreement. They can terminate it anytime. They gave you the chance to stop it happening. All you had to do was simply reply to them and the account would be left as-is. It is not the banks fault that someone threw away your mail. They fulfilled their side of the agreement.

 

You could try taking it further, but the bank are under no obligation at all to reinstate it. Especially with a high credit limit. The reasons being as already outlined in this thread. The banks are a business, not a charity.

 

That said, if you want to take it further, good luck. Youre going to need all you can get.

[slick132]

Hi Gizmo,

 

The a/c is not going to be reopened with the previous credit limit of £7K. You'll have to work your way back up to a higher limit by using the card in a manner that encourages BC to raise it.

 

Other than that, I don't think you're going to get the answer you want to hear.

 

[gizmotesla]

The consumer credit act 1974 is an implied term of the agreement (ie effectively part of the t&c's) to which Barclaycard is a party. Section 98A covers

the issue of a termination notice in this way;

 

legislation.gov.uk/ukpga/1974/39/section/98A

 

98A Termination etc of open-end consumer credit agreements

 

(4)Where a regulated open-end consumer credit agreement, other than an excluded agreement, provides for termination or suspension by the creditor of the debtor's right to draw on credit—

 

(a)to terminate or suspend the right to draw on credit the creditor must serve a notice on the debtor before the termination or suspension or, if that is not practicable, immediately afterwards,

 

(b)the notice must give reasons for the termination or suspension, and

 

©the reasons must be objectively justified.

....

(6)An objectively justified reason under subsection (4)© may, for example, relate to—

 

(a)the unauthorised or fraudulent use of credit, or

 

(b)a significantly increased risk of the debtor being unable to fulfil his obligation to repay the credit.

 

IMHO, since Barclaycard are claiming that the computer generated note is the termination notice (which I dispute in any case), they appear to have violated terms 4(b) and 4© because they haven't given objectively justified reasons.

 

The reason given for closing the account is ostensibly that they thought I no longer needed it, which is no more objectively justified than if I take your property because I thought you no longer needed it.

 

By the way, their choice of wording is interesting; "That is why on 9 April 2014 we'll close your Barclaycard Classic account for you." implying that they act on my behalf and that it is my decision to close it.

 

I appreciate that in these times the law means little to the banks and their regulators (libor, euribor, fx, price fixing scandals...) but, IMHO, Barclaycard should be encouraged to operate more in line with the terms of the agreement, even if it is inconvenient for them to do so.

Edited December 28, 2015 by gizmotesla
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[renegadeimp]

One big problem with your reasoning. The card was never your property. They can revoke it for any reason they like, at any time.

 

They followed the agreement, sent a letter saying please contact us if you want to keep the account. You didn't contact them, so they closed the account.

 

You will not get that credit limit back as your account wasn't deemed suitable.

 

Feel free to take it up with ombudsman or whoever, but they'll just say the same thing as everyone here.

 

They gave every chance for you to keep the account with high limit. You failed to reply, so they took that as you didn't want the account. They are a business and a cc isn't a right.

 

That said good luck again with getting it back, it won't happen, but good luck anyway

[gizmotesla]

One big problem with your reasoning. The card was never your property. They can revoke it for any reason they like, at any time.

 

I'm not so confident that the bank can legitimately revoke it without giving objectively justified reasons because the physical plastic card is their property, although they would perhaps like to portray such invincibility, and they do indeed sometimes operate with such attitude, and it's true that the FOS may turn a blind eye as they did in my case.

 

I'm still hopeful we're not so lawless, at least in the courts if not in financial sector, and that the card agreement has a meaningful purpose, specifically CCA 1974 section 98 4(b) & ©.

 

My physical paper money also is not my property, but I hope to still have some rights and claims to be using it.

[caro]

Can I ask if you are so keen to fight this because of a point of principle or because you now need access to the credit?

 

I have to agree with others that I don't think BC have done anything wrong, but if it's causing you a particular problem, maybe we can examine an alternative solution.

[Old Cogger]

a lot of credit card limits in 2008 were reduced so a lot of people were credit limit downgraded,

 

But your case as transpires was due to non response to a letter from them asking you confirm whether you agree or dispute the action, thrown away the letter = threw away the chance to continue.

 

If you want to keep arguing then why not see a Solicitor and take it from there, or get on with building a credit limit up from scratch.

 

Sure you would be on a hiding regarding trying to re-instate a higher limit.

[gizmotesla]

Can I ask if you are so keen to fight this because of a point of principle or because you now need access to the credit?

 

I have to agree with others that I don't think BC have done anything wrong, but if it's causing you a particular problem, maybe we can examine an alternative solution.

For me, there are a few reasons that give me cause for concern about my experience which make it worthwhile to pursue;

 

1. The refusal by the FOS to investigate or even acknowledge any of the legal aspects or implications of the whole story is fairly alarming. Would you believe that they managed to carry out their entire investigation procedure without ever using the word "agreement"? Their clumsy cover up and whitewash would be funny, but for;

 

2. I drive on the continent a lot, and require the large credit facility for peace of mind, if needed in case of accident, breakdown or other unforeseen emergency. I know I would have options and flexibility to deal with unforeseen problems if I can make payments, even largish ones as necessary, quickly and on the spot. My use is in the ability to draw on credit for emergencies, not for everyday purchases, and this has been my usage pattern for years.

 

3. My confidence in the legal system to investigate and remedy what appears to me to be a case of negligence to take into consideration the interests of the customer, and not effectively communicating information in the appropriate manner when making important irreversible decisions.

 

http://www.legislation.gov.uk/ukpga/2006/14/crossheading/unfair-relationships

 

140A 1(a),(b) & © discusses the determination of unfair relationships within the context of how the creditor has exercised or enforced his rights under the agreement.

 

I don't share your view that Barclaycard has done nothing wrong here, or the other views that they can do anything they like. Perhaps I'm wrong, but although I am new to this forum, I hope we can hold different beliefs and opinions, and still exchange useful information.

[slick132]

98(4)a - They gave you notice.

 

98(4)b - They gave you a reason (non use).

 

98(4)c - The reasons were objective.

 

98(6) - The legislation suggests examples but these are not the only options. I personally think that non-use of the a/c for some 4 years is a decent reason to assume you don't need or want the facility.

 

I have no idea why you think a computer generated letter telling you they're going to close the a/c is not adequate notice of their clearly-stated intent.

 

This a/c is not going to be re-opened with a high credit limit in the foreseeable future. I can't any reason for it to be, nor can I see any reason for anyone to uphold a complaint about the bank's decision.

 

I'll leave you to it .............